Mick Wallace (Wexford, Independent) | Oireachtas source

I move amendment No. 1:

To insert the following after “9th May, 2017”:

", with the inclusion of the following amendments to the draft Order, which Dáil Éireann calls on the Government to make:

(a) the deletion of Article 4(2);

(b) after Article 4(4) the insertion of the following Schedule to the Order:

‘SCHEDULE

Commission of Investigation (National Asset Management Agency)

Terms of Reference

1. In the first module of its work, the Commission is directed to investigate and make a report to the Taoiseach in accordance with the provisions of section 32 of the Commissions of Investigation Act 2004 (No. 23 of 2004) regarding matters relating to the marketing and disposal of the National Asset Management Agency’s Northern Ireland loan portfolio in the period 1st May, 2010 to 30th June, 2014 (the “Relevant Period”).

2. In particular, the Commission is to investigate, having regard to NAMA’s statutory obligations under the National Asset Management Agency Act 2009 and appropriate commercial practice in the Relevant Period:

(a) if the disposal strategy for its Northern Ireland loan portfolio (including the timing of the disposal and sale as a single portfolio) was appropriate in the circumstances and was commercially sound;

(b) if the minimum price applied (and how it was derived) in relation to its Northern Ireland loan portfolio was appropriate in the circumstances and was commercially sound;

(c) if the management of the sales process by NAMA, (including procedures and controls applied, time frames and access to potential bidders and record keeping) was appropriate in the circumstances and demonstrate best corporate governance;

(d) if any conflicts of interest arising in relation to officials, executives, advisors or board members of NAMA, or members of NAMA’s Northern Ireland Advisory Committee occurred and, if so, were managed appropriately in the circumstances;

(e) when and how NAMA became aware of fees allegedly payable to a former member of the Northern Ireland Advisory Committee by bidders on the Northern Ireland loan portfolio, and if this issue was managed appropriately by NAMA during the sale of the Northern Ireland loan portfolio;

(f) if decisions and actions of the Minister for Finance and the Department of Finance relating to the disposal of the Northern Ireland portfolio, including communications with members and officials of the Northern Ireland Executive and meetings with potential bidders, were appropriate in the circumstances; and

(g) if any of the matters at (a) to (f) above or other matters of concern identified by the Commission are likely to give rise to potential public concern in respect of the ultimate returns to the taxpayer.

The Commission shall investigate anything arising outside the State that it considers relevant to any of the matters set out from (a) to (g) above in so far as the Commission considers it practicable, appropriate and reasonable to do so and considers procedures adopted for that purpose can be carried out without unduly delaying the completion of the investigation and with a substantial expectation of being able to obtain the evidence necessary for the investigation.

3. The report to be made by the Commission in relation to the foregoing investigations shall:

(a) set out the scope and findings of the investigations in fulfilment of the purposes set out in 2. above;

(b) respect obligations of confidentiality and commercial sensitivity where those are not incompatible with the public interest; and

(c) set out such recommendations as the Commission sees fit.

4. The Commission shall report on any other matters of concern arising from its investigation of the above matters and make any further recommendations as the Commission sees fit.

5. The Commission shall exercise discretion in relation to the scope and intensity of the investigation as it considers necessary and appropriate, having regard to the general objectives of the investigation.

6. The Commission shall avail of appropriate independent commercial and financial expertise to inform its investigation.

7. Where it deems it appropriate, the Commission shall draw on information already available, including that gathered by, and contained in reports of, the Comptroller and Auditor General, the Public Accounts Committee, and the Northern Ireland Assembly Committee on Finance and Personnel.

8. The Commission shall provide an interim report to the Taoiseach within three months of the date of its establishment and shall provide a final report on this first module of its work by the end of June 2018, subject to section 6 (6) of the Commissions of Investigation Act 2004.

9. These Terms of Reference may be amended under section 6 (1) of the Commissions of Investigation Act 2004 to require the Commission to undertake further modules of work in relation to certain other transactions to which NAMA has been a party or to the operations of the Agency.’; and

(c) further calls on the Government to immediately introduce a Commissions of Investigation (National Asset Management Agency) Act 2017, in the vein of the Commissions of Investigation (Irish Bank Resolution Corporation) Act 2016, to override potential claims of privilege and confidentiality, and the specific provisions of the National Asset Management Agency Act 2009 that would otherwise render the work of the Commission meaningless and make it powerless."

I welcome the terms of reference for a commission of investigation into NAMA's Northern Ireland loan portfolio sale. I will refer to some of the aspects of my amendment. First, however, on a general note, the Minister of State stated in his contribution that I was looking to prevent the Taoiseach from being authorised to appoint the members of the commission. However, if one checks the draft order, it states at paragraph 4.2 that the Taoiseach "is authorised to set the terms of reference of the commission". The Government's draft order does not include the terms of reference but instead states in Article 4(2) that the Taoiseach is authorised to set the terms of reference of the commission. We propose to delete this provision and amend the order to include the terms of reference with our changes. This format is similar to that adopted for the O'Higgins commission and the Grace commission. They included the terms of reference in the order. This is the most transparent way to ensure that the Oireachtas is able to vote on the actual terms of reference. This happened with the Grace commission. We objected to the format and the Government changed it overnight, so it is possible. The Minister of State also stated that changes cannot be made, that we have to move on and that the Government cannot accept my amendment under section 3 or whatever it is. However, everything can be done when there is the will to do it.

In the first section in the proposed terms of reference we have included a timeline and removed the reference to Project Eagle. The main reason is that, technically speaking, Project Eagle did not start until January 2014 whereas the Northern Ireland advisory committee was set up on 13 May 2010. That is when the process began. I can tell the Minister of State that as early as December 2010 Cushnahan was trying to sell the whole Northern Ireland loan portfolio in one block to people in the Far East. That needs to be looked at. We propose to change the time line to May 2010 to 30 June 2014, which is to be defined as the relevant period. The timeline is based on the dates of the Northern Ireland advisory committee which was formed on 13 May. If we do not include a timeline, it is possible that a judge may only be able to examine events since Project Eagle was officially launched in January 2014. Solicitors for NAMA may state that they can only give evidence relating to the period on and after the official launch date of Project Eagle. The timeline proposed will also ensure the experiences of Barry Lloyd, a Northern Irish business man based in Asia, are taken into account. Cushnahan was trying to sell to him in December 2010.

In paragraphs (a) and (b) of the second section in the terms of reference, we have added the phrase "commercially sound". The Comptroller and Auditor General could not comment on the commercial aspect of NAMA's disposal strategy and nor could the Committee of Public Accounts. It is therefore important for this to be examined. The wording "commercially sound" comes from the IBRC commission, which is examining if the transactions in question stand up to commercial scrutiny. In paragraph (d) we have added in that all NAMA's officials, executives, agents and board members who may have had a conflict of interest must also be examined. It is too narrow to include just members of the Northern Ireland advisory committee. We have added a new paragraph (g): "If any of the matters at (a) to (f) above or other matters of concern identified by the Commission are likely to give rise to potential public concern in respect of the ultimate returns to the taxpayer." The reports of the Comptroller and Auditor General and the Committee of Public Accounts both commented on the loss incurred, but it is not alluded to in paragraphs (a) to (f).

Section 10 of the NAMA Act states that its primary objective is to obtain the best achievable financial return for the State.

As an addendum, we have stated that new emergency legislation will need to be introduced "in the vein of the Commissions of Investigation (Irish Bank Resolution Corporation) Act 2016, to override potential claims of privilege and confidentiality, and the specific provisions of the National Asset Management Agency Act 2009", which mean even former staff are sworn to secrecy. For example, Ronnie Hanna cited it as a reason why he could not answer questions at the Committee of Public Accounts. People may hide behind commercial sensitivity, legal privilege, client confidentiality and legal advice and members of NAMA may hide behind the NAMA Act and that should be avoided at all costs.

It is disheartening it has taken nearly two years to get to this point. It is nearly two years since we brought information into the Chamber to the effect that fixer's fees had ended up in the Isle of Man account. Tughans confirmed it in 24 hours but it has taken the Government nearly two years to act on it, which is a disgrace and we have lost a fortune in the meantime through the activities of NAMA, which have gone unchecked in that time. We are talking about £190 million according to the Comptroller and Auditor General's figures on Project Eagle. I assure the House if we go forensically through how NAMA behaved, the cost to the Irish State will be closer to €20 billion in total. We have not brought in 10% of the information we have got through namaleaks.comand other sources because we have not had 100% proof for everything. What has come to our attention is frightening. Only recently, Deputy Michael McGrath raised the Project Tolka loan sale by NAMA through parliamentary questions and credit to him for doing so. We recently wrote to Colony NorthStar, the purchaser of Tolka, and queried its role in the sale. It was not very keen to answer our questions for some reason. We understand from the Minister, Deputy Noonan's reply to Deputy McGrath, the debtors were involved in the sales process. We also understand from another source that serious sums of money have changed hands. Watch that space.

Every week we learn something new about NAMA and its operations. Before Project Eagle was officially launched, there was a project known as Project Shift, which consisted of loans of a Northern Ireland debtor relating to German supermarkets. It was purchased by the one and only, Cerberus. From parliamentary questions, correspondence with the Comptroller and Auditor General and internal NAMA emails, we have learned a bit more about Project Shift. Ronnie Hanna ran the Project Shift sale. Ron Bolger represented Cerberus on the deal. He is the guy who arranged the meeting with Cerberus and the Minister, Deputy Noonan, the day before the bids for Project Eagle were due. I have spoken to Brian Rowntree in the past week about Project Shift. He was an external member of the Northern Ireland advisory committee, NIAC; the other was Frank Cushnahan. He has never heard of Project Shift. He told me he was led to believe by NAMA, via the chairperson and Ronnie Hanna, that Project Eagle was the first sale of any element of the Northern Ireland portfolio through a third party loan acquisition group. Since Mr. Rowntree told me this, NAMA has confirmed Project Shift was never discussed at any Northern Ireland advisory committee meetings. I do not understand it. Why was it never discussed? I also asked NAMA whether Frank Cushnahan advised the debtor in Project Shift and NAMA told me it was not in a position to establish if he did or not. That is nothing short of extraordinary. It is a "Yes" or "No" answer. NAMA knows the answer but chooses not to give it to us.

It gets worse. Cerberus was sale agreed on Project Shift before Project Eagle was officially launched. The assets in Project Shift were still included in Project Eagle. The final reserve for Project Eagle was £1.23 billion. Cerberus bid £1.241 billion, which was £11 million more than the final reserve. The price Cerberus paid NAMA for Project Eagle was £1.137 billion, £104 million less than its bid. This £104 million reduction was due to sales completed between bid and closing and included Project Shift for £76 million to Cerberus. This has been confirmed to me by the office of the Comptroller and Auditor General. What this all means is that when Cerberus was bidding for Project Eagle, it knew it was getting Project Shift already so Cerberus was really working off a reserve price of £1.154 billion - the original £1.23 billion reserve minus the £76 million for Project Shift. If Cerberus was bidding on Project Eagle, knowing the reserve would actually be £76 million lower, it could probably afford to bid a bit higher. How is this fair on Fortress, the only other bidder, which did not have access to anything like the information that Cerberus had because Cerberus bought its information? Fortress was bidding on Project Eagle without the knowledge that a minimum of £76 million would be taken off the price of the portfolio. Is this not a form of insider trading? Cerberus had non-public knowledge that the price for Project Eagle would be lower. Fortress did not have this knowledge. Why did NAMA not write to all bidders who signed non-disclosure agreements at the start of Project Eagle and inform them that a debtor was sale agreed for £76 million and that it may be removed from the price? I have written to the Committee of Public Accounts today to ask it to examine all aspects of Project Shift.

Ireland has been a number one seller of distressed loan sales in Europe for four years in a row. In 2016, loan sales by NAMA and Irish banks totalled €12.1 billion, making up almost a quarter of the total of €49.9 billion of distressed debt sales in Europe. In 2015, Irish loan sales amounted to €23.3 billion par debt. They are astonishing figures for a country with a population of 4.5 million. What makes it worse is the discounts these loans were bought at were usually between 70% and 80%. It is little wonder we are top of the table. It is unbelievable it has taken this long for the Government to do the right thing. I give credit to Sinn Féin, which has supported this from the start. The delay has cost us so much money. We bicker about different amounts in here but what it has cost us is astronomical. The incoming Taoiseach is worried about what welfare fraud costs when NAMA can lose in a day what social welfare fraud costs in a year.

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